00 - OVERVIEWExecutive Summary: A Liquid Market with Cheaper Government Funding
Demand is strong. Treasury bill auctions drew bids of TZS 1,205B against a TZS 678.3B tender (1.8x); bond auctions drew TZS 1,267.2B against TZS 535.8B (2.4x). The Government accepted TZS 654.6B of bills and TZS 489.7B of bonds.
Yields fell sharply over the year. The overall T-bill yield is 4.85% (6.03% in Sep-25); the 10-year bond is 10.69% (13.74%). But the 364-day bill has risen since March (5.80% to 6.38%) as the BoT tightened.
Debt is bond-heavy and bank/pension-funded. Bonds are 84.6% of the TZS 41,113.5B stock; commercial banks and pension funds hold 55.9%. The overdraft share fell from 13.2% to 10.4%.
The interbank market is calm. Overall rate 6.67% inside the 4.75-7.75% corridor; turnover TZS 4,791.7B; reverse repo demand fell to TZS 2,624.5B on ample liquidity.
Government Yields and the Interbank Rate, Sep-2025 to Sep-2026
| Test | Evidence | Reading |
|---|---|---|
| Demand | Bid cover 1.8x bills, 2.4x bonds | Strong |
| Price | T-bill 6.03% to 4.85%; 10y 13.74% to 10.69% | Cheaper funding |
| Structure | Bonds 84.6% of debt; bills 4.6% | Long-dated |
| Liquidity | IBCM 6.67%; reverse repo down 14% | Ample, stable |
01 - AUCTIONSPrimary Market: Who Bids, How Much Is Accepted
In September the BoT ran two Treasury bill auctions (combined tender TZS 678.3B) and three bond auctions: 5-year (TZS 145.6B), 10-year (TZS 182.9B) and 15-year (TZS 207.3B). Government raised TZS 356B (TZS 178B bonds, TZS 178B 364-day bills) against domestic debt service of TZS 556.4B (principal 250.8B, interest 305.6B).
Tender, Bids and Accepted, Sep-2026
Issuance for Financing, Sep-2025 to Sep-2026
| Sep-2026 | Tender (TZS B) | Bids (TZS B) | Accepted (TZS B) | Bid cover | Accepted / tender |
|---|---|---|---|---|---|
| Treasury bills | 678.3 | 1,205.0 | 654.6 | 1.78x | 96.5% |
| Treasury bonds | 535.8 | 1,267.2 | 489.7 | 2.36x | 91.4% |
Table 1.1. Source: BoT; TICGL/TERI calc. Bond tender is the sum of the three auctions.
02 - YIELD CURVEA Curve That Has Shifted Down and Steepened
Between September 2025 and September 2026 the curve fell at almost every tenor, most at the short end (35-day bills from 6.20% to 2.41%) and in 10-15 year bonds (about 3 points). Yet 364-day bills rose, so the bill curve steepened.
Yield Curve: September 2025 vs September 2026
Real Yields (Nominal minus 4.3% Inflation)
Benchmark Yield Paths
| Tenor | Sep-25 % | Sep-26 % | Change (pp) | Real (pp) |
|---|---|---|---|---|
| 35-day | 6.20 | 2.41 | -3.79 | -1.89 |
| 91-day | 6.81 | 3.40 | -3.41 | -0.90 |
| 364-day | 5.99 | 6.38 | +0.39 | +2.08 |
| 5-year | 12.48 | 9.53 | -2.95 | +5.23 |
| 10-year | 13.74 | 10.69 | -3.05 | +6.39 |
| 15-year | 13.91 | 10.79 | -3.12 | +6.49 |
| 25-year | 13.19 | 11.48 | -1.71 | +7.18 |
03 - DOMESTIC DEBT & INVESTORSStock, Instruments and Who Holds the Paper
The domestic debt stock reached TZS 41,113.5B at end-September 2026, a marginal rise from TZS 40,899.5B in August. Commercial banks and pension funds hold more than half.
Government Domestic Debt Stock, September of Each Year
Debt by Instrument
Who Holds Government Debt?
| Holder (TZS B) | Sep-25 | Sep-26 | Share Sep-26 | Growth |
|---|---|---|---|---|
| Commercial banks | 10,752.0 | 11,703.1 | 28.5% | +8.8% |
| Pension funds | 10,282.0 | 11,256.1 | 27.4% | +9.5% |
| Bank of Tanzania | 6,750.9 | 7,163.8 | 17.4% | +6.1% |
| Insurance | 1,825.1 | 2,030.1 | 4.9% | +11.2% |
| Others (incl. non-residents) | 7,068.6 | 8,095.4 | 19.7% | +14.5% |
| Total | 37,459.0 | 41,113.5 | 100% | +9.8% |
- T-bills are only 4.6% of the stock (TZS 1,896.4B, -7.9% y/y): refinancing risk is low but short-end market depth is thin.
- Banks held TZS 12,056.9B of securities in September (+38.2% y/y) while private credit grew 34.2%: banks are funding both the Government and the private sector.
04 - INTERBANK CASH MARKETLiquidity Redistribution Inside the Policy Corridor
Total interbank transactions rose to TZS 4,791.7B in September from TZS 4,566.2B, with the 7-day tenor taking 62%. The overall rate stayed at 6.67%. The BoT's reverse repo auctions fell to TZS 2,624.5B from TZS 3,037.4B on elevated system liquidity. Policy rate corridor: 4.75% to 7.75% (Lombard rate 7.75%, repo and reverse repo 6.25%, discount rate 8.75%).
Interbank Rates by Tenor, Sep-2025 to Sep-2026
Rate Structure by Tenor, Sep-2026
Market Activity, Aug vs Sep 2026
| Interbank rate (%) | Sep-25 | Jun-26 | Aug-26 | Sep-26 |
|---|---|---|---|---|
| Overnight | 6.29 | 5.53 | 6.37 | 6.26 |
| 2 to 7 days | 6.43 | 5.90 | 6.45 | 6.56 |
| 8 to 14 days | 6.93 | 6.46 | 7.09 | 7.06 |
| Overall | 6.45 | 6.00 | 6.67 | 6.67 |
05 - FOREIGN ACCESS & OUTLOOKOpening Government Securities to the World
Government Notice No. 206 of 2026 (Foreign Exchange Amendment Regulations, 17 July 2026) removed geographic restrictions and the minimum holding period for Government securities, completing a gradual capital-account liberalisation.
| Year | Step |
|---|---|
| 2014 | EAC residents allowed limited access (40% ceiling per issue, 12-month holding) |
| 2022 | SADC residents and diaspora added; holding period cut to six months |
| Jan 2025 | Competitive Treasury bond auctions begin |
| May 2026 | Electronic Matching System for the interbank FX market |
| Jul 2026 | Government securities opened to all foreign investors |
| Aug 2026 | Tanzania Sovereign Yield Curve launched |
- Expected gains: more auction competition and lower borrowing cost, deeper secondary market, better price discovery, FX inflows for reserves (USD 6,031.9M), eligibility for global bond indices.
- Risks: exchange-rate exposure, reserve losses and higher yields if capital reverses abruptly. The shilling averaged TZS 2,654.91 per USD in September (-7.4% y/y).
| Watch | Why it matters | Indicator |
|---|---|---|
| Next MPC decision | Inflation 4.3%, oil USD 102.3: bias is firm | CBR, corridor |
| Foreign participation | New demand but flight risk | Non-resident share ("others") |
| Bond supply | Heavy issuance could lift 15-year yields | Accepted vs tender |
| Bank liquidity | Credit +34.2% competes with securities | IBCM turnover, reverse repo |
06 - SOURCESSources & Data Notes
- Bank of Tanzania, Monthly Economic Review, October 2026: Sections 2.4, 2.6; Tables 2.2.1, 2.6.5, 2.6.6, A3, A4; Charts 2.4.1, 2.4.2, 2.6.1, 2.6.2; boxed note on foreign access (GN 206 of 2026).
- TICGL/TERI arithmetic: bid cover (bids/tender), acceptance ratios, real yields (nominal minus 4.3%), growth rates. Table 2.6.5 and 2.6.6 use the Sep-25 stock of TZS 37,459.0B (excluding liquidity papers); Chart 2.6.1 shows TZS 37,819.1B, so growth rates here use the table basis. Figures marked provisional by BoT. This page is research information, not investment advice.
07 - QUICK ANSWERSFrequently Asked Questions
What is the Treasury bill yield in Tanzania in September 2026?
4.85% overall, unchanged from August; 35-day 2.41%, 91-day 3.40%, 182-day 5.11%, 364-day 6.38%.
What are Tanzania Treasury bond yields?
5-year 9.53%, 10-year 10.69% and 15-year 10.79%. Auctions of TZS 535.8 billion drew TZS 1,267.2 billion of bids and TZS 489.7 billion was accepted.
How big is Tanzania's domestic debt?
TZS 41,113.5 billion at end-September 2026; securities are 89.6% of it and banks plus pension funds hold 55.9%.
What is the interbank cash market rate in Tanzania?
6.67% overall in September 2026, inside the 4.75-7.75% corridor; turnover TZS 4,791.7 billion with the 7-day tenor at 62%.
Muhtasari kwa Kiswahili
Soko la dhamana za serikali na soko la fedha kati ya benki (interbank) linaendeleaje? Kwa mujibu wa Mapitio ya Kila Mwezi ya Uchumi ya Benki Kuu (Oktoba 2026), minada ya Septemba 2026 ilipata mahitaji makubwa: hati fungani za Hazina (T-bills) zilipokea zabuni za TZS bilioni 1,205 dhidi ya bilioni 678.3, na hatifungani (bonds) bilioni 1,267.2 dhidi ya bilioni 535.8.
- Mavuno (yields): wastani wa T-bills ni asilimia 4.85 (6.03 mwaka jana); hatifungani za miaka 5, 10 na 15 ni asilimia 9.53, 10.69 na 10.79.
- Deni la ndani: TZS bilioni 41,113.5, ongezeko la asilimia 9.8; hatifungani ni asilimia 84.6; benki za biashara na mifuko ya pensheni zinashikilia asilimia 55.9.
- Soko la interbank: kiwango cha jumla asilimia 6.67 ndani ya ukanda wa asilimia 4.75-7.75; mauzo yalifikia TZS bilioni 4,791.7, na siku 7 zikiwa asilimia 62.
- Wawekezaji wa kigeni: tangu 17 Julai 2026 dhamana za serikali zimefunguliwa kwa dunia nzima; faida ni ushindani na akiba ya fedha za kigeni, hatari ni kutoka kwa ghafla kwa mitaji.
Chanzo: BoT Monthly Economic Review, Oktoba 2026; mahesabu ya TICGL/TERI. Maelezo zaidi: economist@ticgl.com.